In the previous session, The Nifty 50 witnessed sharp selling pressure on May 29, declining 1.5 percent and decisively breaking below its short-term moving averages as well as the midline of the Bollinger Bands. On the weekly chart, the index failed to close above the previous week’s high, while short- and medium-term moving averages continued to trend downward, indicating sustained weakness in the broader trend.
Technically, the index has broken below a rising trendline on the daily chart, signalling a resurgence of bearish sentiment. The Nifty also failed to sustain above its 50-day EMA and formed a long bearish candle with an upper wick, highlighting strong profit booking at higher levels. Notably, this marked the third consecutive session where the index formed a pronounced upper wick with above-average volumes, reflecting persistent selling pressure near resistance zones.
The broader structure remains weak as the index continues to trade below all key moving averages. Momentum indicators have also deteriorated. The RSI slipped to 43.37 and witnessed a bearish crossover, while the MACD is on the verge of a negative crossover. These signals collectively indicate increasing bearishness and weakening market momentum.
From a technical perspective, the immediate support zone is placed around 23,400–23,250. A decisive break below these levels could strengthen bearish momentum and drag the index lower in the coming sessions. On the upside, the 23,800–24,000 zone remains a critical hurdle. Sustained trade above this resistance band may pave the way for a recovery towards 24,300.
Derivatives data reflects weakening sentiment. The Nifty Put-Call Ratio (PCR) declined sharply to 0.74 on May 29 from 1.02 in the previous session, marking its lowest closing level since February 27. The sharp fall in PCR indicates reduced put writing activity and increasing caution among market participants.
India VIX, the market fear gauge, rebounded sharply by 8.03 percent to 16.18 after witnessing a correction over the previous several sessions. The rise in volatility signals increasing discomfort among bulls. Analysts believe that for bullish sentiment to strengthen meaningfully, the VIX needs to sustain below the 15 level.
Option chain positioning indicates immediate support around the 23,400–23,250 zone, while strong resistance remains visible in the 23,800–24,000 zone due to aggressive call writing activity. This suggests that the market may continue to remain under pressure unless key resistance levels are reclaimed.
The Nifty Bank also remained under pressure and formed another bearish candle with a sizeable upper shadow on the daily chart. The banking index failed to sustain above its 50-day EMA for the third consecutive session and slipped below short-term moving averages, signalling weakening strength in the banking space.
Technically, Bank Nifty nearly filled the bearish gap formed on May 25 with above-average volumes, providing additional strength to the bearish setup. The RSI declined further to 46.91, though it remained marginally above the signal line. Meanwhile, the MACD flattened but continued to remain above the reference line, while positive histogram bars weakened further, indicating fading bullish momentum.
Immediate support for Bank Nifty is placed around 53,700–53,500, while resistance is seen near 55,200–55,550. A decisive move above resistance levels will be required to improve the short-term outlook for the banking index.
Overall, the technical setup suggests a positive opening supported by strong global cues and easing volatility. While momentum indicators indicate weakening bearish pressure, the broader trend remains cautious as the benchmark indices continue to trade below key moving averages. A decisive breakout above 23,800 on Nifty will be crucial for further upside momentum in the coming sessions,” saysAakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited.